• Products

    World Bond Fund Monthly Positioning & Outlook

    View Now >

  • Insights

    Human-Centric Investing Podcast

    Listen to Latest Episode >

  • Practice Management

    Applied Insights Team

    Learn More >

  • Resources

    Tax Center

    View Now >

  • About Us

    Human-Centric Investing

    Learn More >

Funding a Variety of Costs with 529 Plans

    

Many clients contribute to a 529 plan with the idea that accumulated savings will one day help pay for tuition at a traditional four-year college. What people may not realize is that this isn't the only possible use of 529 plan savings.

Savings accumulated in a 529 plan account may be used to fund a variety of programs and costs under 529 plan rules. What your clients need to know is whether 1) a particular school is "eligible," and 2) if the types of costs associated with attending that particular school are considered "qualified expenses."

 

Many Types of Institutions Are Eligible

Eligible higher education programs include thousands of four- and two-year colleges and universities, trade schools, masters and doctoral programs, online schools, and even some foreign institutions. For example, in Canada, more than 100 schools meet the eligibility requirements according to 529 plan rules.1

 

How to Determine a School's Eligibility

Eligibility is connected with a school's ability to offer students the opportunity to apply for federal financial aid. If you're unsure whether a particular school is eligible, call the institution's administrative office and ask for the federal school code assigned by the U.S. Department of Education.All institutions assigned this code are considered eligible according to 529 plan rules.²

 

College Costs

Many who save for their children's higher education believe that tuition is the only cost to be concerned about. While tuition is often the biggest cost, it's certainly not the only one involved with sending a child off to college. For the typical four-year college experience, there's room and board, fees, books, supplies, personal expenses, and transportation costs to consider as well.

The good news is that your clients' 529 plan can go a long way toward helping them pay for a variety of college expenses such as certain room and board expenses, books and supplies.

 

What to Budget for Beyond Tuition

If your clients haven't planned for college costs beyond tuition, you may want to remind them to begin thinking about them now.

The cost of room and board can vary greatly depending upon the college, and whether the student lives on or off campus or commutes from home. For students who live and eat on campus at a four-year college, the average annual cost is $12,900 for private schools, and $11,510 for public schools.3 Some students save on room and board by opting to commute from home instead.

Additional college expenses that often get overlooked in the budgeting process include books and supplies4 (both qualified expenses) which averaged $1,240 per year.3

Many clients contribute to a 529 plan with the idea that accumulated savings will one day help pay for tuition at a traditional four-year college. What people may not realize is that this isn't the only possible use of 529 plan savings.

Savings accumulated in a 529 plan account may be used to fund a variety of programs and costs under 529 plan rules. What your clients need to know is whether 1) a particular school is "eligible," and 2) if the types of costs associated with attending that particular school are considered "qualified expenses."

 

Many Types of Institutions Are Eligible

Eligible higher education programs include thousands of four- and two-year colleges and universities, trade schools, masters and doctoral programs, online schools, and even some foreign institutions. For example, in Canada, more than 100 schools meet the eligibility requirements according to 529 plan rules.1

 

How to Determine a School's Eligibility

Eligibility is connected with a school's ability to offer students the opportunity to apply for federal financial aid. If you're unsure whether a particular school is eligible, call the institution's administrative office and ask for the federal school code assigned by the U.S. Department of Education.All institutions assigned this code are considered eligible according to 529 plan rules.²

 

College Costs

Many who save for their children's higher education believe that tuition is the only cost to be concerned about. While tuition is often the biggest cost, it's certainly not the only one involved with sending a child off to college. For the typical four-year college experience, there's room and board, fees, books, supplies, personal expenses, and transportation costs to consider as well.

The good news is that your clients' 529 plan can go a long way toward helping them pay for a variety of college expenses such as certain room and board expenses, books and supplies.

 

What to Budget for Beyond Tuition

If your clients haven't planned for college costs beyond tuition, you may want to remind them to begin thinking about them now.

The cost of room and board can vary greatly depending upon the college, and whether the student lives on or off campus or commutes from home. For students who live and eat on campus at a four-year college, the average annual cost is $12,900 for private schools, and $11,510 for public schools.3 Some students save on room and board by opting to commute from home instead.

Additional college expenses that often get overlooked in the budgeting process include books and supplies4 (both qualified expenses) which averaged $1,240 per year.3

 

1 This and additional information may be found on www.FAFSA.ed.gov.

2 IRS.gov, 2020

3 National averages at four-year universities for the 2019-2020 term. Source: The College Board, Trends in College Pricing, 2020.

4 Must be required for attendance at a qualified institution.

220424

The material on this site is for informational and educational purposes only. The material should not be considered tax or legal advice and is not to be relied on as a forecast. The material is also not a recommendation or advice regarding any particular security, strategy or product. Hartford Funds does not represent that any products or strategies discussed are appropriate for any particular investor so investors should seek their own professional advice before investing. Hartford Funds does not serve as a fiduciary. Content is current as of the publication date or date indicated, and may be superseded by subsequent market and economic conditions.

Investing involves risk, including the possible loss of principal. Investors should carefully consider a fund's investment objectives, risks, charges and expenses. This and other important information is contained in the mutual fund, or ETF summary prospectus and/or prospectus, which can be obtained from a financial professional and should be read carefully before investing.

Mutual funds are distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA/SIPC. ETFs are distributed by ALPS Distributors, Inc. (ALPS). Advisory services may be provided by Hartford Funds Management Company, LLC (HFMC) or its wholly owned subsidiary, Lattice Strategies LLC (Lattice). Certain funds are sub-advised by Wellington Management Company LLP and/or Schroder Investment Management North America Inc. Schroder Investment Management North America Ltd. serves as a secondary sub-adviser to certain funds. Hartford Funds refers to Hartford Funds Management Group, Inc. and its subsidiaries, including HFD, HFMC, and Lattice, which are not affiliated with any sub-adviser or ALPS. The funds and other products referred to on this Site may be offered and sold only to persons in the United States and its territories.

© Copyright 2021 Hartford Funds Management Group, Inc. All Rights Reserved. Not FDIC Insured | No Bank Guarantee | May Lose Value